One of Germany’s largest refineries will receive more crude oil from Kazakhstan for an extended period, the German Economics Ministry confirmed on Monday during a visit by Chancellor Scholz to the Central Asian country.
The PCK refinery in Brandenburg sources some of its crude oil from Kazakhstan, but has been operating at reduced capacity since 2023, when Germany stopped using Russian oil.
Until then, the plant processed only Russian oil to supply northeastern Germany with gasoline, diesel, heating oil and other products.
But when the Kremlin launched a war against Ukraine, Germany cut off imports of Russian oil and quickly began looking for other energy sources to reduce its heavy dependence on Russian supplies.
Berlin also took control of the refinery, which is largely owned by subsidiaries of Russia’s state oil company Rosneft.
Now, officials in Kazakhstan are signing a follow-on contract through Rosneft Germany to ensure security of supply and also to protect the operations of Rosneft Germany, PCK Schwedt and the Miro and Bayernoil refineries in the longer term.
Kazakhstan supplied about 1 million tons of crude oil to PCK last year and is expected to supply 1.4 million tons this year.
According to a government spokesman, the contracts signed in Kazakhstan provide for deliveries after 2024, although no exact quantities were mentioned.
The contracting party is not the government, but the owners of the company.
Two German subsidiaries of the Russian state-owned company Rosneft hold a 54% majority stake in PCK and have been under receivership since September 2022.
Scholz confirmed last weekend that sales negotiations are underway with Rosneft’s subsidiaries and are expected to be completed by the end of this year.
Qatar would be a potential discussion partner.
The German ministry said the planned transfer of ownership could affect whether the European Commission approves a planned subsidy for the extension of a pipeline from the port of Rostock to Schwedt.
State Secretary Michael Kellner said the Commission had made a preliminary assessment under state aid law. The government subsidy of up to €400 million ($444 million) for the pipeline upgrade is fundamentally justifiable as aid if Russia’s Rosneft is no longer the indirect owner.
